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Regeneron Pharmaceuticals Inc REGN

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Maintaining Our $500 FVE for Regeneron Following In-Line Q1

Karen Andersen, CFA Sector Strategist

Analyst Note

| Karen Andersen, CFA |

We're maintaining our $500 fair value estimate for Regeneron following solid first-quarter results that were boosted by revenue for COVID-19 antibody therapy REGEN-COV. Regeneron's revenue grew 38% (20% excluding REGEN-COV), with strong recovery in demand for the firm's core therapy, ophthalmology drug Eylea, leading to 15% growth in U.S. Eylea sales. Global sales of immunology drug Dupixent (booked by partner Sanofi) grew 48% as launches continue in new indications and penetration increases in the original atopic dermatitis indication, with younger age groups now included in the prescribing label. Regeneron saw the benefits of Dupixent's growth in its Sanofi collaboration revenue, which also grew 48%. While Regeneron has regained full rights to MUC16 (ovarian cancer) and BCMA (multiple myeloma) bispecific antibody programs from Sanofi, this does not change our valuation after factoring in higher research and development costs as well as our decision to raise Regeneron's long-term tax rate to 20% (to reflect potential U.S. tax reform). We continue to think that Regeneron's dominant Eylea franchise will perform well against new branded competition, and potential high-dose data later this year and a regulatory filing in 2022 could help lengthen the duration of efficacy and ward off biosimilar threats (likely in 2024). We continue to think that Eylea and Regeneron's growing oncology and immunology portfolio warrant a narrow moat rating.

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Company Profile

Business Description

Regeneron Pharmaceuticals discovers, develops, and commercializes products that fight eye disease, cardiovascular disease, cancer, and inflammation. The company has several marketed products including: Eylea, approved for wet age-related macular degeneration and other eye diseases; Praluent for LDL cholesterol lowering; Dupixent in atopic dermatitis, asthma, and nasal polyposis; Libtayo in cutaneous squamous cell carcinoma; and Kevzara in rheumatoid arthritis. Regeneron is also developing monoclonal antibodies with Sanofi in immunology and cancer, and bispecific antibodies and antibody cocktails with other collaborators and independently.

777 Old Saw Mill River Road
Tarrytown, NY, 10591-6707
T +1 914 847-7000
Sector Healthcare
Industry Biotechnology
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Aggressive Growth
Employees 9,123


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